An Island pharmaceutical company will have new oversight soon after two companies struck a deal.
On Tuesday, Mallinckrodt Pharmaceuticals (NYSE: MNK) announced that it is selling P.E.I.-based BioVectra to H.I.G. Capital for $250 million.
“H.I.G. has made it absolutely clear they are excited about our business,” said Oliver Technow, president of BioVectra, with a nod to their current partner. “We have been absolutely privileged over the last four, almost five years with our parent company, Mallinckrodt.”
Founded in 1993, H.I.G. Capital is a private equity and alternative assets investment firm based in Miami.
Sometimes a sale means downsizing or restructuring, but Technow says in this case, it is all positive.
“I really expect BioVectra will continue to be a major player in bioscience across Canada but also in Atlantic Canada as an employer. I don’t expect these things to change.”
BioVectra is a contract development and manufacturing organization (CDMO) with clients around the globe. They’ve been in business for over 45 years and create and produce ingredients for pharmaceutical products.
The company is about to complete a large addition to its facility on Aviation Drive in Charlottetown.
They’re also wrapping up a new build in Windsor, N.S. The new facility will focus on biologics, which Technow called a “fast-expanding market” in the pharmaceutical industry.
Heather Delage, vice-president of business development at BioVectra, said there is a lot of recognition for the growth potential of CDMOs right now and H.I.G. is getting in on the action.
“It’s really a continuation of completing those projects and utilizing that new capacity to capture growth potential,” said Delage, also the general manager of the Windsor facility.
“Our clients are working with us in terms of scaling up product to be produced in those new facilities.”
Mike Gallagher, managing director at H.I.G. Capital, is looking forward to partnering with an established team.
“We are excited to support BioVectra’s exceptional leadership and highly dedicated employees,” said Gallagher. “BioVectra demonstrates a tremendous ability to generate robust organic growth and utilizes a broad set of technical capabilities to deliver outstanding service and quality.”
H.I.G. has several companies in its portfolio that may complement what BioVectra has to offer, said Technow.
“This is what they usually do, these kinds of companies, they create synergies.”
The deal is expected to take effect in the fourth quarter of this year.